Walsh is one of the better Free Press writers IMO, and he hit the nail on the head with today’s piece on Detroit’s potential trip to bankruptcy court, which is looking increasingly likely.
I found the comments by “restructuring guru” Ken Buckfire particularly insightful:
“What we’re really saying to the creditors is, you were unfortunately invested in a Madoff scheme,” Buckfire said…
“The city of Detroit made promises they could never pay. It wasn’t us, it was 40 years of bad politicians,” Buckfire added, noting that unsecured creditors may get nothing and others face significant cuts. The message is, “We can‘t pay you. Here’s the best we can do, and here’s what’s best for everybody. So it’s rough justice,” he said.
…Orr and Buckfire have concluded that Detroit’s extraordinary mess is in a class of its own.
“I think Detroit is totally unique,” Buckfire said. “It doesn’t set a precedent for anybody else. You’re talking about a city which has been hammered by two incredibly major trends. One is the decline of its core manufacturing base, which we all know about. Second, is the sheer political mismanagement over 40 years.
“Maybe you could have survived one; you can’t survive both,” he added. “So how is any other city in America like that? Even though there are cities that lost their manufacturing base like Pittsburgh, even Dayton, they didn’t have this kind of problem because they were well run politically.”